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Michael Dell
 
Michael Dell
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Michael Dell Interview

Founder & Chairman, Dell Inc.

July 3, 2008
Kailua-Kona, Hawaii

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  Michael Dell

Let's talk about how you became involved with computers, and started your own business at such a young age. We've read that you took apart the first PC that you got your hands on. Is that true?


Michael Dell: Yeah. I wanted to see how it works, so I took it apart. A good thing about the early personal computers is that they had completely kind of standardized chips, and so you could literally get a book about each chip and read what each pin did, and how signals were processed through the chip. You could design your own circuits and you could modify them, and you could literally see exactly how the thing was working. That was sort of the classroom for me. That was where I learned the basics of how these things worked. Then I kind of became fascinated with, "Well, how could you improve it?" How could you make it do more things? How could you expand it? How could you make it go faster? How could you hook it up to other computers and let your imagination run wild?

[ Key to Success ] Preparation


You noticed that the parts were not made by IBM.

Michael Dell: That's right.


The earliest PCs had IBM's name on the outside but there was no IBM on the inside. And what I saw was that not only did it take an enormous amount of time for the components to get from the people who made them all the way to the customer, but it was a very inefficient and expensive process. So I would read about improvements in technology in Byte magazine, but then it would take a year or more before you could actually buy it. So I was kind of a frustrated consumer, thinking, "Hey, where is all this stuff that I keep reading about?" and kind of thought, "Well gee, what if you could sell directly to the end customer and do it way more efficiently with better service, the people who really knew about the product. Now, I had no idea this thing called the Internet would come along and make it real easy for people to buy things online and connect, but absolutely felt that over time more and more people would be knowledgeable enough to buy on the phone.

[ Key to Success ] Vision


But how would they know about you?

Michael Dell: Well, you advertise. Interestingly enough, the logical conclusion most people would have after hearing all that is, "Oh, you were selling to consumers and hobbyists." But actually it wasn't much of our business. Most of our business was large companies. We were kind of discovered by large companies who wanted computers to make themselves more productive, and public institutions, and that that became the origins of the growth of the business.

Michael Dell Interview Photo
So having taken this computer apart and figured out a lot of stuff about how it worked, you actually developed a business of your own quite early on. Could you tell us how that came to pass in your freshman year of college?

Michael Dell: Yeah. When I was freshman at the University of Texas, I was going to school and had every intention of going to school. I was kind of playing around with this as a hobby while I was going to school. It was a really fun hobby for me because I was really interested in computers, and it provided a little extra income, so I could buy the latest stereo and whatever I wanted to buy. You know, 18-year-old, 19-year-old kids like to do stuff like that.

So you were already making some money off of it?

Michael Dell: Yeah, yeah. When I was a freshman in college, selling upgrade kits and enhancing computers. My parents got wind of this and they were really upset, because they thought that I should really only focus on going to college.

What were you studying?

Michael Dell: Biology. My father's a doctor, my brother's a doctor, lots of doctors in the family, so I was going to be a doctor. So they were, they were very, very upset with me. You know, "Michael, you've got to get your priorities straight."


Around Thanksgiving of 1983, my parents kind of made me commit that I wasn't going to do this computer business anymore. I was only going to focus on my studies. So that lasted about ten days. It was during that time that I decided that I was going to start a company. So actually, my parents telling me to stop doing it is probably what caused the company to get created. If they hadn't done that it might've just been a hobby. But what I kind of reflected on in those ten days is that I really love this, and it was enormously exciting, tremendously fun. So like any other 18-year-old who wants to do what their parents don't want them to do, you just don't tell them. So that's what I did. I kind of went about the path to start the company without really telling my parents.

[ Key to Success ] Perseverance


Where did you keep these computers that you upgraded?

Michael Dell: Well, they were in Houston and I was in Austin. And so...


I kind of moved into a larger apartment that had really high ceilings so I could kind of stack things up and managed to conceal it from them for quite some time. And then I basically came to an arrangement with my parents. I said, "Look, I really want to go do this, and I know you don't want me to go do it, but I've checked with the University of Texas, and the way it works at UT is that you could take a semester off and you can come back." And so I said, "We'll, we'll agree to this. I'll take the semester off -- the fall of '84 semester -- and I'll go and do this. If it doesn't work out, I'll go back to school, and if it does I'll just keep doing it." And so they agreed. If they hadn't agreed, I probably would've done it anyway to be honest with you. So in May of '84, I incorporated the company and off we go.

[ Key to Success ] Courage


Wasn't there a time when your parents came to visit unexpectedly while you were still having this covert business?

Michael Dell: Yeah. That would've been in November of '83.


They would kind of hear from their friends, "Oh, Michael's doing so great. His business is going really well." And they were like, "What are you talking about? He's supposed to be in college." They had a couple of kind of surprise visits. They would just kind of show up, you know, like, "Where are your books?" "Oh, they're at the library." I'd sort of have good answers for things, and they couldn't quite figure it all out. But eventually they kind of figured out, "Wait a second. There's too many computer parts around here." It was a bit hard to disguise what was going on. So that's when we had this talk.

[ Key to Success ] Courage


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